New exchange between Gaza and Israel; 1 dead

Israelis stand next to damaged road after a rocket fired by Palestinian militants from the Gaza Strip, landed in the southern Israeli town of Beersheba, Wednesday, March. 23, 2011. Gaza militants say they've fired rockets at Israel after the Israeli military killed seven Palestinians, including thr

/ AP

Israelis stand next to damaged road after a rocket fired by Palestinian militants from the Gaza Strip, landed in the southern Israeli town of Beersheba, Wednesday, March. 23, 2011. Gaza militants say they've fired rockets at Israel after the Israeli military killed seven Palestinians, including three children and their uncle. The first rocket landed near the coastal city of Ashdod, and the Israeli military said it carried out a retaliatory airstrike early Wednesday. No Israeli injuries were reported in the rocket attack, but Palestinians say one militant was killed in the airstrike. Hours later, a rocket struck southern Israel's largest city, Beersheba, moderately wounding one person. Islamic Jihad claimed responsibility for both rocket attacks. The killing of the civilians Tuesday dramatically escalated a recent round of simmering violence. Israel says a mortar strike targeting militants went astray.(AP Photo/Oded Balilty)

Israelis stand next to damaged road after a rocket fired by Palestinian militants from the Gaza Strip, landed in the southern Israeli town of Beersheba, Wednesday, March. 23, 2011. Gaza militants say they've fired rockets at Israel after the Israeli military killed seven Palestinians, including three children and their uncle. The first rocket landed near the coastal city of Ashdod, and the Israeli military said it carried out a retaliatory airstrike early Wednesday. No Israeli injuries were reported in the rocket attack, but Palestinians say one militant was killed in the airstrike. Hours later, a rocket struck southern Israel's largest city, Beersheba, moderately wounding one person. Islamic Jihad claimed responsibility for both rocket attacks. The killing of the civilians Tuesday dramatically escalated a recent round of simmering violence. Israel says a mortar strike targeting militants went astray.(AP Photo/Oded Balilty) (/ AP)

AMY TEIBEL and IBRAHIM BARZAK, Associated Press

Gaza militants barraged southern Israel with rockets and mortars Wednesday, drawing retaliatory Israeli airstrikes in an escalation of the gravest hostilities in the area since Israel went to war in the Palestinian territory two years ago.

Israeli Prime Minister Benjamin Netanyahu vowed decisive action against militants and suggested that future operations would not be surgical.

"No state would tolerate ongoing rocket fire on its cities and its citizens, and the state of Israel obviously will not tolerate it," Netanyahu told parliament.

A text message from Gaza's Hamas rulers said the territory's prime minister had been in contact with militant factions trying to keep the postwar truce from unraveling. But in the meantime, the Gaza interior ministry announced that it had evacuated security installations and scaled back the number of security forces on the street to lessen their risk of becoming targets.

The Islamic Jihad militant group said it fired rockets at four Israeli cities to avenge Israel's killing of eight militants and civilians in Gaza the day before. The group said one of its fighters was killed Wednesday in an Israeli airstrike, and Israeli police said an Israeli civilian was wounded by rocket shrapnel in southern Israel's largest city, Beersheba.

A small faction allied with Gaza's ruling Hamas militant group claimed responsibility for a volley of mortars that struck Israel.

The killing of three children and their uncle Tuesday in what Israel called an errant shelling dramatically escalated the recent flare in violence.

Dozens of weeping women dressed in black gathered at the house of three of the victims. Pieces of flesh stuck to the outer wall of the house, which was pocked by shrapnel.

The civilians and the militants killed Tuesday were buried in a joint funeral in Gaza City, their coffins lined up in a row in a mosque for pre-burial prayers. Dozens of armed men, including relatives, fired in the air as the bodies were brought out, chanting "God is Great" and "Revenge, revenge."

Israel and Hamas have largely observed a truce since the Israeli military offensive in Gaza ended in January 2009. But with the cease-fire fraying in the past week, Netanyahu threatened to respond vigorously to the stepped-up attacks from Gaza.

"It's possible that blows will be exchanged, it's possible it will continue for some time. But we are very resolved to strike at terror elements and block their ability to hurt our citizens."

Netanyahu did not elaborate. But Israel Radio reported that he planned to huddle with security officials to discuss strategy.

Earlier in the day, Israeli Home Front Minister Matan Vilnai predicted that a military confrontation with Hamas was "only a matter of time."

"We are taking all appropriate steps in this direction," Vilnai told Army Radio.

The Hamas text message said Gaza Prime Minister Ismail Haniyeh had made a round of calls to militant leaders, including Islamic Jihad chief Ramadan Shalah, trying to defuse the violence.

Both Israel and Hamas are thought to be reluctant to engage in another war, after the 2009 conflict killed hundreds of Palestinian civilians and heavily damaged thousands of homes and businesses. Thirteen Israelis also died, and Israel's image was badly tarnished by allegations of war crimes that the Israeli government denies.

But although the war inflicted heavy damage on Hamas, the Iranian-backed group has replenished its arsenal with bigger and better weapons. Last week, Israel intercepted a cargo ship that it said was loaded with sophisticated anti-ship missiles and other arms sent from Tehran to Gaza.

Over the weekend, Gaza militants launched their heaviest mortar barrage against Israel in years following an Israeli airstrike, stoking a new round of violence.

The mortar shells fired Saturday were the same type as those intercepted last week on the cargo ship, Israel says.